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By Michael Genevay
Chase Energy Solutions Inc.; and
Paramount Mortgage Lending Group
continued on page 62 »
Better Living Through Benchmarking
Comparative energy-efficiency disclosure data reduces buildings’ carbon footprints
to measure a building’s efficiency against
itself over time. It provides data for energy conservation and sustainability for
maintenance purposes. Public officials
use benchmarking as a method of identifying wasteful or inefficient buildings in
the government portfolio, and through
this process and the data acquired from
it, incorporate lessons learned in the formulation of future legislation.
There are a number of U.S. jurisdictions, including two states, one county
and nine major cities, that have legislation and disclosure laws enacted and in
effect requiring energy benchmarking.
California and Washington state lead
the nation with their statewide benchmarking requirements. Montgomery
County in Maryland has had legislation
in place since this past April, and nine
cities require energy benchmarking and
disclosure requirements: Austin, Texas;
Boston; Chicago; Minneapolis; New
York; Philadelphia; San Francisco; Se-
attle; and Washington, D.C.
Much of the legislation enacted regarding benchmarking has been in the
works for years, with a key milestone
coming in November 2007, with the passage of California Assembly Bill 1103
(AB 1103). The initial disclosure date for
AB 1103 was set for January 2010, but
the bill was delayed several times, finally going into effect this past January.
Benchmarking disclosure requirements
vary slightly by jurisdiction, but almost
all jurisdictions require a minimum of
reporting the benchmarking data to
the government. Several jurisdictions
require public website disclosure, and
many go even further, mandating disclosure of energy ratings at the time of a
transaction to buyers, lessees and lenders. For example, California, Washington state, San Francisco and Seattle all
require mandatory energy disclosure in
Energy benchmarking is the pro- cess of standardizing the en- ergy capability of a commercial
building, with the potential necessity of
disclosing the findings to interested or required parties. These parties may include
building owners, property managers, utility companies and government agencies,
in addition to real estate and mortgage
professionals involved in the sale and financing of commercial properties.
The objective of this benchmarking is to create a carbon footprint or
energy-efficiency disclosure as a measure of energy consumption compared
to other buildings of the same type. The
disclosure depicts how the building’s
efficiency rates in several prescribed
categories. Benchmarking is somewhat
akin to appraising, in that it provides a
standardized rating mechanism whereby
similar buildings of design and purpose
may be compared and contrasted as
part of a national database.
Benchmarking also provides the ability
the cases of buying, selling, refinancing
or leasing commercial property.
The Institute for Market Transformation identifies three building types affected by benchmarking: municipal,
commercial and multifamily. Each jurisdiction has its own requirements for the
minimum size of buildings that require
benchmarking, but all use square footage or unit count as qualifiers.
Among the jurisdictions, municipal buildings have ranges from 10,000
square feet to 50,000 square feet, commercial buildings include ranges from
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Michael Genevay is an energy-efficiency
adviser for Chase Energy Solutions Inc., an
energy service company and a founding
member of the U. S. Energy Efficiency Alliance.
Reach Genevay at mgenevay@chaseESI.com.
Michael Berkley is an account executive
with Paramount Mortgage Lending Group, a
national mortgage banker. Reach Berkley at